Introduction
Hiring a property manager can streamline your rental business, freeing you from tenant calls, maintenance headaches, and compliance worries. But not all management fees cover the same services. Before signing a contract, it’s crucial to understand exactly what’s included in that monthly percentage—and which services will trigger extra charges. This guide breaks down the typical inclusions and exclusions of standard property management fees, so you get transparent, predictable costs and avoid unwelcome surprises.
What’s Typically Included in a Standard Management Fee
Most residential property management firms charge 8%–12% of monthly rent in exchange for a core set of services. Here’s what you can generally expect:
1. Rent Collection & Disbursement
- Invoice Tenants: Generating and sending rent notices each month.
- Payment Processing: Accepting online payments, checks, or ACH transfers.
- Owner Payouts: Disbursing net proceeds (rent minus fees and expenses) on a regular schedule—often monthly.
2. Tenant Relations & Communication
- 24/7 Emergency Line: Handling urgent tenant calls after hours (e.g., plumbing leaks, heating failures).
- Routine Correspondence: Responding to tenant inquiries, coordinating access for inspections or repairs, and enforcing lease terms.
- Move-In/Move-Out Coordination: Conducting initial walkthroughs, explaining rules, and overseeing final inspections.
3. Maintenance Coordination
- Work Order Management: Receiving maintenance requests via phone, email, or tenant portal.
- Vendor Vetting & Scheduling: Dispatching licensed contractors for routine and emergency repairs.
- Quality Assurance: Verifying completed work and approving invoices.
4. Financial Reporting
- Monthly Statements: Detailed breakdown of income, expenses, and outstanding balances.
- Year-End Summaries: Profit/loss statements for tax purposes.
- Online Owner Portal: 24/7 access to real-time financials, lease documents, and maintenance logs.
5. Lease Enforcement & Renewals
- Late Rent Follow-Up: Automated notices and follow-up calls to delinquent tenants.
- Lease Renewal Offers: Preparing and negotiating renewals for existing tenants.
- Eviction Support: Initiating eviction proceedings when necessary (note: legal fees usually extra).
What’s Typically Not Included in Standard Fees
Beyond the core services, many managers bill separately for specialized tasks. Always request a full fee schedule to understand additional costs.
1. Tenant Placement / Leasing Fees
- Advertising & Marketing: Professional photography, online listings, signage.
- Tenant Screening: Credit, criminal, eviction history, and income verifications.
- Lease Preparation: Drafting and executing new lease agreements.
Typical Fee: 50%–100% of one month’s rent (one-time).
2. Maintenance & Repair Markups
- Vendor Markup: Many firms add 10%–20% to contractor invoices to cover coordination overhead.
- Emergency Premiums: After-hours or holiday service calls often carry higher rates.
Tip: Ask if you can opt out of markups by approving vendors yourself.
3. Inspection Fees
- Move-In/Move-Out Inspections: Detailed condition reports with photos.
- Periodic Inspections: Quarterly or annual walkthroughs.
Typical Charge: $50–$150 per inspection.
4. Eviction & Legal Fees
- Attorney Retainers: Court filings, service fees, and representation.
- Court Costs: Filing fees, sheriff’s lockout charges.
Typical Charge: $200–$500 flat fee plus pass-through costs.
5. Lease Renewal Fees
- Renewal Processing: Preparing updated agreements and handling paperwork.
Typical Fee: 25%–50% of one month’s rent or a flat $100–$300.
6. Advertising-Only Services
- If you only want marketing without full management, expect a standalone advertising fee (often $50–$200 per listing).
7. Project Management & Renovations
- Capital Improvements: Managing larger rehab or remodeling projects.
- Vendor Bidding & Oversight: Detailed RFP process and inspection of major work.
Typical Charge: Hourly project management rate or percentage of project cost.
How to Avoid Unexpected Charges
- Request a Detailed Fee Schedule
- Insist on a line-item list of every possible fee before signing.
- Negotiate Bundles
- Some managers will bundle leasing and renewal fees into a flat “all-in” rate.
- Clarify Markup Policies
- Ask if maintenance markups are negotiable or capped.
- Define Service Levels
- Specify which services (e.g., inspections, renovations) you’ll handle directly versus manager-coordinated.
- Review Your Contract Annually
- Business needs evolve—revisit your agreement to ensure the right balance of included services and costs.
Conclusion
Standard property management fees cover the essential tasks of rent collection, tenant relations, maintenance coordination, and financial reporting. However, specialized services—tenant placement, inspections, legal actions, and major project management—typically incur additional charges. By understanding what’s included and what’s not, requesting transparent fee schedules, and negotiating where possible, you’ll secure a management partnership that fits your budget and meets your service expectations. Clear agreements and proactive communication are the keys to avoiding surprises and ensuring your rental investments thrive.